Tuesday, January 27, 2009

Uriah Heeps On Parade

by digby

It's Republican day on the cable networks. They are crawling over every show like fire ants. I presume the Democrats must be too busy combing the bill for what they can take out of it to stop the cacophonous whining. But they really should be out there trying to defend themselves because the conventional wisdom is gelling that Obama is going to fail in his most important mission --- his promise to end partisanship --- because the Democrats are corrupt spendthrifts who want to lard up the stimulus with pet projects and defy their own president's allegedly heartfelt desire that conservative policies be continued.

Ain't post-partisanship grand? More from MSNBCW:

A.B. Stoddard: If he doesn't get Republicans tomorrow in the House, he's hoping he can get Republicans in the Senate that the senate Democrats will move a bit towards the Republicans, which forces the House to vote on a new bill in a week's time or more. So I think that's why you hear Robert Gibbs talking about how the debate is still open and that the process is still open and that they're exchanging ideas here because they want it to stay fluid.

Contessa Brewer: I've gotta tell you AB, when you hear that the bill that the House came up with is not the plan the Obama White House put out, it's surprising to me that given how important it is that president Obama bring Republicans into this and get everybody into the same big tent that the Democrats would add to this bill, unrelated programs, things that maybe in their own right should be passed, health care reform, medicaid issues. Maybe that's something that should be looked at. But what is it doing in an economic stimulus plan?

Stoddard: And that is the Republicans' very fair question. Obviously the congress is a co-equal branch of government, they are the legislative body and they write the laws for this country, the president does not write the law by himself....

Brewer: But doesn't it put the president in a rough position? He has promised not to allow pork spending in this bill!

Stoddard: Yes it does. And that is the problem. That is why he's removing the 200 million in the bill for contraceptives because that is not emergency spending and there's no way you can define it as such. And I think that is why, when those Republicans go to meet with Rahm Emmanuel, the chief of staff at the white house, I have a feeling that more is going to come out by way of concession. Because it is a problem he is having with Democrats. The Democrats have written the bill. Chairman Obey, chairman of the appropriations committee has been writing this bill since November. It is not President Obama's bill. They have to work together.

That is why you're hearing Republican leaders say, "his problem is not with us, his problem is with the Democrats."

"

The GOP hissy fit has worked like a charm. The villagers are all on the same page: the "problem," as always, is that Democrats are not doing everything they are precisely told to do by the Republicans. They are being partisan. The Republicans weeping and wailing like Victorian spinsters works every time.

Brewer went on to harangue a Democratic spokesman about all these allegedly superfluous programs in the bill and finally demanded: "The Democrats were wrong, right? They were wrong!" Now, Brewer is a very silly media person. But she doesn't think this stuff up on her own. She follows the party line. And it's pretty clear which party that is.

Here's Mike Pence again five minutes later on Hardball:

Pence: Look, this bill is a long litany of liberal pet programs that will have very little to do with actually getting the economy moving again. Look, there's token tax cuts in the form of rebates, but Chris, I would ask you, and many members asked this, what is 50 million dollars for the National Endowment for the Arts going to do to create jobs? What is 200 million dollars in improving the National Mall going to do to put Americans back to work?

This is a flawed bill, and as I said to the president personally, this is a bill that was not fashioned with what I believe is his very genuine desire for a bipartisan compromise on issues like the stimulus. The Democrats in congress, as I told him, have completely ignored his call for bipartisan compromise and they're bringing a partisan Democrat bill to the floor tomorrow that will not create jobs and will not lift our economy and Republicans are poised to oppose it.

They smell blood. You can see it in their eyes.

But it gets worse. Matthews then channeled Dick Armey and completely misrepresented the tax provisions in the bill as well:

Matthews: It seems like there's a real fight over taxes here. It's not just the amount of tax cuts, it's who gets them. You want a reduction in the rates. Even working people who pay 15% will get a lower rate maybe 10%. Instead, he wants to give a lot of the tax cuts to people who don't even pay income tax, people who are way at the bottom. What do you think of the politics of that? is he going for the very poor people as opposed to the working people? What's he doing and what are you guys trying to do politically?

John Ensign: What we're trying to do is choose the right policy. Something that actually stimulates the economy, that creates jobs. It's not just what we give to individuals, it's also the kind of business tax cuts to actually create jobs. You know, we have the second highest corporate tax rates in the industrialized world. Microsoft, which is a great American country, has zero exports from the United States. They have a lot of exports from Ireland because, guess what, Ireland has a 12 1/2% corporate tax rate. We have a 35% corporate tax rate. If we could lower the corporate tax rate that would be one of the best things we could do to make American business more competitive in the world.

Matthews: Congressman Pence, do you agree that the presidents tax cuts have been aimed at the very poor and they should be aimed at people who work and pay taxes? What's your philosophy about this. What's your policy goal here?

Pence went on to say that we've already done the rebate thing and 10 bucks a week won't lift the economy or create jobs.(!) Then he cried again that the Republicans hadn't had the opportunity to present their plans in the spirit of bipartisanship, and if they had, average married couple would be looking at three thousand dollars in their pockets. Then he whined some more about bipartisanship.

I expect this from Republicans. They are doing what they are trained to do which is oppose. And they are good at it. The bigger problem is the way this debate, such as it is, is being held for the public. I saw very few Democrats talking about this and the media are either dumb or in the tank for the Republicans.

Look, I blame the Democrats for this too. They needed to explain that the government has to spend money directly to create jobs, whether it's a job working backstage at Shakespeare in the Park or putting in new lawns on the mall or staffing family planning clinics. It's all jobs, many of which already exist and will be kept rather than lost if the feds can kick in some money. Tax cuts are used to stimulate demand, but the last round didn't halt the slide. Neither has interest rate cuts. None of the usual stuff is working. That's why a direct injection of federal money into the economy is required.

Republicans babble about tax cuts no matter what the situation. (They talked about them after 9/11 and Katrina, fergawdsake. They have nothing else.) You would think this was obvious at this point, but apparently everyone in Washington has been so indoctrinated in conservative propaganda that they just can't grasp it.

Matthews betrays a common fundamental misunderstanding of how the tax code works, which the Republicans are cynically using to advance their own agenda. Nobody seems to get this one except for Barney Frank (and he didn't have a good explanation for it either when I saw him talk about it this morning.) If you give a credit to just the people who work and pay payroll taxes (medicare and social security) but who don't make enough money to pay federal income taxes, you are directly targeting the working poor, by definition. Rich people usually don't do their own taxes so they never look at the tax tables. But those of us who do see that many people at minimum wage jobs don't end up paying any federal income taxes --- after they take their standard deduction and other tax credits. It's not that they don't work or pay anything fergawdsake. In fact, the federal government holds on to their money all year and then refunds it to them after they file.

If, on the other hand, if you do what the Republicans cynically want Obama to do, and lower the rates from 15% to 10%, you are lowering the rates for every taxpayer in America, even the millionaires. No matter how much they earn, everyone pays the same rate on the first 20 thousand or so of their earnings. Just as everyone then pays the same rate on the next 20 thousand and so on. (Say, 10% on the first 20 and 15% on the second 20%) The rate goes up the more you earn, but not on the whole amount you earn, only the difference between brackets. That's one reason that all the nonsense about being in a "higher tax bracket" isn't exactly correct. Only the amount you earned above the lower bracket is taxed at the higher rate.

The Republicans want to give a tax break to people who don't need it and want to deny a targeted tax credit to the working poor, as usual. Nothing new there. I'm sure Matthews has an accountant to deal with the five million plus he earns each year, so these details are beyond him and he just takes Rush's word for it. (In fact, from comments later on the show, he thinks it's a great idea that Obama wants to send checks to people who don't work for purely political reasons. With friends like this ...)

This debate is a mess. Hopefully old Harry doesn't decide to listen to his pal Ensign and add a bunch of useless corporate tax breaks to the bill, but I suppose it doesn't matter anymore. It appears to me as if they don't even care what's in the bill at this point, they just want to get something out there. I would guess they believe the psychological jolt alone of passing the bill will get the economy moving. I'm skeptical about that, but then I'm just me and these are the best and the brightest so I guess we just have to have faith that they know what they're doing.

But I think any hopes we might have had for the bill being seen in the short term as a vindication of progressive economic philosophy and the antidote to conservative economic failure are probably gone. The idea of government spending vs tax cuts was never fully debated so tax cuts remain the default cure and government spending (except for defense) is all "entitlements" and "pork."

But again, the proof is in the pudding. If the economy sharply turns around, Obama will be the winner. Let's hope that predictions of market psychology work this time.